The federal court of appeal recently dismissed an appeal by Jaamiah Al Uloom Al Islamiyyah Ontario, a Canadian registered charity that was revoked by CRA for non-compliance.

CRA had conducted an audit of the charity and found that the charity was not keeping proper books and records, annual information returns were not being filed and charitable receipts were being issued improperly, and the charity's status was subsequently revoked. The Charity appealed this decision, stating that the sanction of revocation of its registration was too extreme and failed to address the remedial steps the charity had undertaken to addres these issues, specifically their decision to retain experienced and qualified accountants. The court dismissed the charity's appeal. The court stated the following: 

[13]           Registered charities have the privilege of issuing charitable donation receipts which entitle taxpayers to reduce their income tax payable under theAct on the basis of such receipts. This privilege carries with it important responsibilities.

[14]           One of the key responsibilities of the Charity is to maintain proper books and records that will enable that Minister to verify the accuracy and appropriateness of the income tax deductions and credits that the Charity makes available to those who receive charitable donation receipts from it. In the circumstances of this appeal, the Charity failed to provide the Minister with books and records that would allow the Minister to determine if the appropriate amount of income tax relief was being provided by the Charity to its donors at the expense of the fisc.

[15]           In our view, this basic requirement is foundational in the sense that the absence of proper books and records places the Minister in the position of being unable to meet her basic obligation to verify the accuracy and validity of the charitable donation receipts that the Charity has issued. Thus, it is apparent that this non-compliance on the part of the Charity is serious and justifies the Minister’s conclusion that the extreme sanction of revocation is warranted.

You can access the full case here: